Russian only recently increased their interest rate to 10.5%. This increase to 17% shows you just how desperate they are. It now, more than ever, seems obvious how little foreign reserve they actually have. Having already spent tens, if not hundreds, of billions trying to stabilize the currency I'm starting to think they're running dry. Maybe Russian Oligarchs have been using the fund as a personal piggy bank.
Russia's foreign-exchange reserves: What's really there?
According to the central-bank website, in November Russia had $419 billion-worth of reserves. Even after this year’s drop, only a handful of countries have bigger reserves than Russia.
“In reality”, says Anders Aslund of the Peterson Institute for International Economics, a think-tank, “Russia’s effective international reserves are only $203 billion.”
But this recent move to stem the tide, and prevent the need for further capital injection, presents an even gloomier image. It is anyones guess as to how much reserve they actually have. I'm guessing very very little.
About $170 billion of its assets sit in two big wealth funds, the Reserve Fund (worth about $89 billion) and the National Wealth Fund (worth about $82 billion).
The economy may shrink 4.5 percent to 4.7 percent next year[.]
Previous predictions -- by the same bank -- went from: no growth this year and limited growth over next three years; possible 0.5% contraction to stability over the next year; and now they are saying possible contraction by 4.5-4.7%. Conservatively you can add 50% -- in line with the velocity (1st / 2nd derivative -- the rate of change / the change in the rate of change) of the money supply -- to any official estimate.
Russia's foreign reserves are little more than a guess. They're state-owned (or quasi-state-owned) businesses owe ~600b in foreign-debt; debt that cannot be extended due to sanctions.